Remember, if you feel a debt collector is doing something wrong in how they are pursuing a debt, please contact a consumer lawyer for a consultation. California residents can contact my office (the Law Offices of Paul E. Smith) for a free consultation via email (psmith@paulsmithlaw.com) or telephone (858-679-3396). Residents of other states can locate an attorney by visiting the National Association of Consumer Advocates website.

Founded in 1986, Unifund is now the second-largest purchaser of U.S. consumer debt, with 2006 revenue of $375 million. And it's poised to get a lot bigger.

How much they pay for the debt they are collecting on:

Typically, [Unifund] pays no more than 10 cents on the dollar for accounts that other collection agencies have tried - and failed - to convert to cash. Then, [it] uses proprietary programs with code names like Avalanche and Iceberg to gather data on debtors. Sometimes, Unifund sues to collect. But usually it bundles accounts into salable commodities . . . . Collection agencies and law firms typically pay 20 cents to 30 cents on the dollar for Unifund accounts, transactions that let [Unifund] double or triple [its] original investment.

The problem not mentioned in the article is Unifund suing on debt for which it has paid almost nothing, and for which it has little to no documentation. Unifund's involvement with alleged debts can also cause problems for consumers by Unifund purchasing and then reselling the alleged debt, again with little to no documentation.

The bottom line is that consumers need to be extremely cautious if they come across an alleged debt with which Unifund is involved. If sued by Unifund, immediately consult with a consumer attorney. California residents can contact me at my firm via telephone (858-679-3396) or email (psmith@paulsmithlaw.com). for a free consultation. Residents of other states can locate an attorney through the National Association of Consumer Advocates website.

A boom in the multibillion-dollar debt-buying industry has resulted in thousands of consumers getting dunned by collectors trying to cash in on debts so ancient they are no longer enforceable in court or are beyond the seven-year period in which they can be reported to credit bureaus.

A large number have long been charged off by original creditors and sold for pennies on the dollar to aggressive third-party debt collectors who get whatever they can from borrowers.

Government records show that since the settlement, consumers have filed more than 3,000 complaints against NCO, many citing letters similar to the one Barnes received.

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NCO isn't the only debt collector that has generated complaints, which have soared nationally in recent years.

Consumers last year lodged 58,687 collection complaints. This was up from 13,900 in 2000. Many newer complaints focus on companies that buy old debt, an increasingly competitive industry that has grown from a handful of firms in the 1990s to more than 500 last year.

Yes, the debt collection industry is booming. But, it is competitive and some debt collectors will readily violate the Fair Debt Collection Practices Act in order to try to collect a debt. Whether you actually owe the debt, think you may owe the debt but are unsure, or (as in many cases) clearly do NOT owe the debt, debt collectors may not violate your consumer rights under the FDCPA. If they do, you are entitled to any actual damages you suffer, statutory damages of up to $1,000 (and potentially additional statutory damages under state law), and your attorney fees and costs (many attorneys, including myself, make fees contingent and then seek to force the debt collector to pay those fees).

A debt-collection company licensed to operate in Minnesota has paid a record fine of $125,000 for 15 violations that included an unauthorized bank withdrawal and employing a violent felon as a collector.

Arrow Financial Services of Niles, Ill., also agreed to design and implement a compliance program within 60 days as part of the enforcement action by the Minnesota Department of Commerce.

Arrow Financial Services has quite a reputation in the debt collection industry. My friend and consumer advocate Bud Hibbs lists Arrow as the sixth worst debt collection company in America, and has some interesting comments about this company. If you have run into this company, consult with an attorney (I will be happy to offer a free consultation to any California residents or assist non-California residents in locating a qualified attorney in their area).

The company and its owner, Ted Ellis Crosby, are charged with multiple violations of the federal Fair Debt Collection Practices Act and Florida's Consumer Collections Practices Act.

The Attorney General's Office began an investigation after receiving numerous complaints from the Better Business Bureau, including that company workers were posing as law enforcement officers or attorneys, threatening arrest by military police, and even posing as members of the Attorney General's Office.

"Few words could adequately describe the appalling nature of the tactics used against these citizens," said Attorney General Charlie Crist.

As seen in the comments on this blog, the list of consumers harassed by Ellis Crosby must be very long indeed. Hopefully this company will be out of business shortly.

Thomas Backal calls his line of work the "ugly toe" on the big foot of commerce - "something that nobody wants to talk about." Backal, 32, is chief executive of Anderson, Crenshaw & Associates in Dallas, which operates Debt Liquidation Group, a debt-collection company.

"Ugly toe" indeed. An interesting analogy for the chief executive of a debt collection company to be making.

Despite the industry's shaky public image, Backal and his competitors make no apologies for how they earn a living. They see themselves as serving an important role in the economy and say if everyone would live up to their obligations, there wouldn't be any need for debt collectors, or any complaints about them.

Here we have the debt collection industry's attitude displayed right out in the open. There simply can be no excuse for anyone ever being late on a credit payment. Nevermind illness. Nevermind job loss. Nevermind the loss of a loved one. Just make the payment, and we won't have any problems. Oh yes, and nevermind that the debt may not actually even be owed.

Anderson Crenshaw is the subject of so many unresolved complaints from consumers that the Better Business Bureau of Metropolitan Dallas Inc. has given it an "unsatisfactory" record. Anderson Crenshaw is no longer a member of the BBB, so it has stopped responding to complaints from it, Backal said.

Ah, now we are getting somewhere. The "ugly toe" feels there can never be any viable excuse for a consumer to not make a credit payment, but apparently feels debt collectors can violate the Fair Debt Collection Practices Act at will in order to collect on the debts, and that consumer complaints should simply be ignored (after all, if the consumer would just "honor their obligations" they wouldn't be experiencing these problems).

Certainly consumers should, if they can, honor their obligations. But even owing a valid debt is absolutely no excuse for any debt collector to violate the Fair Debt Collection Practices Act. If you feel a debt collector has violated the Fair Debt Collection Practices Act, you should report them to the Better Business Bureau, the Federal Trade Commission, and contact a private attorney to learn about your rights. If in California, feel free to contact my office. Outside California, visit the National Association of Consumer Advocates website to find a "fair debt collection" attorney in your area.

Embarrassing calls at work. Threats of jail and even violence. Improper withdrawals from bank accounts. An increasing number of consumers are complaining of abusive techniques from some companies that are part of a new breed of debt collectors.

The Fair Debt Collection Practices Act makes calls at work illegal if the debt collector knows or should know that an employer prohibits such calls, and makes it illegal to contact third parties other than one call to obtain contact information under strict guidelines. Threats of jail and violence are obviously illegal under the FDCPA, as is improperly withdrawing money from an alleged debtor's bank account. Most importantly, consumers can sue a debt collector for any of these violations and obtain actual damages, statutory damages, and attorney fees. Most attorneys, including myself, take cases on a contingency basis. In other words, for low cost or even no cost in some circumstances, consumer victims of debt collectors can get a lawyer and sue. Unfortunately, most consumers are unaware of the power that they have, and some debt collectors take advantage of this lack of knowledge and constantly violate the FDCPA. The article continues:

They are debt buyers, outfits that acquire unpaid bills from credit card firms and other credit providers for pennies on the dollar and then try to collect. Some of these companies go after bills so old that consumers can no longer be sued for them in court or punished for them on their credit reports.

I am seeing quite a bit of debt collector pursuit of time-barred debt, as are my colleagues. In California, for example, the statute of limitations is four years to pursue debt based on a written contract. While the debt collector can continue to pursue the time-barred debt beyond the statute of limitations, it cannot threaten to file a lawsuit (that would be threatening to take legal action it cannot legally take, a violation of the Fair Debt Collection Practices Act) and certainly cannot file the lawsuit, although many do. Again, consumers victimized by this practice should contact an attorney that handles fair debt collection cases. I handle cases in California. Outside California, consumers can locate an attorney through the National Association of Consumer Advocates.

Please read the rest of the Washington Post article. It contains good examples of debt collector abuse and bit of a look inside the collection industry.

Allstate Adjustment Bureau, Las Vegas, NV: After a thorough investigation, complete examination of the record and full discussion of the issues, the ACA Ethics and Professional Responsibility Committee voted to expel Allstate Adjustment Bureau from the association. The expulsion took effect on July 1, 2005.

Network Commercial Service, Inc.: After a thorough investigation, complete examination of the record and full discussion of the issues, the ACA Ethics and Professional Responsibility Committee voted to expel Network Commercial Service, Inc., of Granada Hills, CA, from the association. The expulsion became effective on June 28, 2005.

Profix Software, Inc., Irving, TX: After a thorough investigation, complete examination of the record and full discussion of the issues, the ACA Ethics and Professional Responsibility Committee voted to expel Profix Software, Inc. from the association, effective June 23, 2005.

Ellis Crosby and Associates, Jacksonville, FL: After a thorough investigation, complete examination of the record and full discussion of the issues, the ACA Ethics and Professional Responsibility Committee has voted to suspend the membership of Ellis Crosby and Associates, effective June 1, 2005. This suspension shall last ninety days. During this period, Ellis Crosby has been ordered to undertake certain actions as directed by the Ethics Committee and provide proof of completion to the Committee.

The list is long and (not) distinguished of debt collectors who are, shall we say, "lacking" in the ethics department. My good friend and outstanding consumer advocate Bud Hibbs maintains a list of debt collectors to avoid, including a "top ten" list of America's worst debt collectors. I recommend visiting his site.

The top ethics complaint for June concerned debt collectors harassing consumers—specifically, rude and threatening comments directed towards consumers. The Fair Debt Collection Practices Act (FDCPA) prohibits a collector from engaging in any harassing or abusive practices in connection with the collection of a debt.

Not only does the FDCPA prohibit collectors from harassing consumers, it provides a remedy when they do in the form of statutory damages of up to $1,000 plus reasonable attorney fees and costs. Of course, if a consumer suffers actual damages he or she is entitled to compensation for those damages as well. California consumers who have been harassed can email me or visit my website for a free consultation. Consumers outside California should consult the National Association of Consumer Advocates database to locate an attorney in their jurisdiction.